Benefits in Kind Under Closer Scrutiny: A New 20% Cap Applies from the 2026 Tax Year

Starting with the 2026 income year, Belgian businesses will need to pay closer attention to the structure of their remuneration packages. As part of the personal income tax reform, benefits in kind (BIK) that are valued on a lump-sum basis may no longer exceed 20% of an employee’s or company director’s taxable remuneration.

Why this reform?

Many employers complement salaries with tax-efficient benefits such as company cars, housing, IT equipment or interest-free loans.

The Belgian government believes that these benefits should no longer become the main component of remuneration. The reform therefore aims to ensure that salary once again remains the primary element of an employee’s compensation package.

Which benefits are affected?

The new limitation applies only to benefits in kind that are taxed using a statutory lump-sum valuation, including:

• 🚗 Company cars;
• 💻 Computers, internet connections and other IT equipment;
• 🏠 Free accommodation, including heating and electricity when provided as part of the housing benefit;
• 💶 Interest-free or low-interest loans;
• 🍽️ Certain employer-provided meals;
• 🧹 Domestic staff made available by the employer;
• 📈 Certain stock options subject to lump-sum valuation.

Benefits taxed on their actual market value, such as certain warrant plans, are not affected by this new rule.

How is the 20% limit calculated?

The calculation is made for each individual beneficiary.

The total value of lump-sum assessed benefits may not exceed 20% of the individual’s taxable remuneration, as reported on:

• Form 281.10 for employees;
• Form 281.20 for company directors.

An excess for one person cannot be offset by a lower percentage for another employee or director.

What happens if the limit is exceeded?

The tax consequences may be significant:

• For employees, the employer will be liable for a special contribution of 7.5% on the excess amount of benefits;
• For company directors, the company may lose the reduced corporate income tax rate.

What does this mean for your business?

The reform does not abolish benefits in kind. Instead, it encourages businesses to review the balance between cash salary and tax-efficient benefits within their remuneration policies.

Companies that rely heavily on lump-sum valued benefits for directors or key employees should consider carrying out a review before year-end to ensure compliance with the new rules.

Your accountant can help assess your remuneration packages, verify compliance with the new 20% threshold and recommend any adjustments needed to optimise your tax position while avoiding unnecessary additional costs.

Source: Belgian Personal Income Tax Reform Act of 9 July 2026 (adopted by the Chamber of Representatives).